3 Things Every First Time Homebuyer Needs to Know

Some of the links in this post are from our sponsors. Read our disclosure to see how we make money.

Are you a first-time homebuyer and don't know where to start? Here are three tips I learned after we bought our first house that saved us money.

I’ve gone from being a first-time homebuyer to a new homeowner for only a few weeks now, but it’s already been quite the rollercoaster. So far, our dishwasher broke, our hot water heater broke and the electricity went out twice. I’m not even moved in enough to know where my socks are, and I feel like I’ve already spent a ton of money just to get the house in working order.

Don’t get me wrong. We’re really excited to be first-time homeowners. We love our house. It has quite a bit of charm since it was built in 1942, including all sorts of interesting little nooks and crannies. My favorite part is that I have the entire upstairs to myself as my mom-cave. I’ve never had an office in six years of writing online, and now I can actually lock my door and people will stay out of my space. Quite luxurious indeed.

That said, I’ve been thinking of some tips that I’d like to pass on to anyone else out there who might be a first-time homebuyer looking to buy their first home soon.

Build an Emergency Fund


Whether you’re shopping for a starter home or a fixer upper with charm, you definitely need an emergency fund. Like many other first-time homebuyers, we had a thorough inspection of our home and made a detailed list of everything that needed to be repaired.

During the home inspection, everything worked just fine in the house, including the dishwasher and hot water heater. Then, the first week we moved in, it all started to break.

It’s hard to build an emergency fund before buying a house because you’re focused on saving enough for the down payment and closing costs; while an emergency fund is just as important, it often becomes an afterthought. Once you’ve got the first two savings goals hit, it can be very hard to delay house shopping until you have a few thousand dollars saved up in your emergency fund. However, as evidenced above, you will need that savings because homeowners have to fix things that break all the time.

Get a Home Warranty


Our realtor recommended that we ask for the seller to buy a home warranty for us as part of our purchase negotiations. I’m glad she recommended this because, as mentioned above, we’ve already used it.

For example, when it came to the hot water heater, we only had to pay for a $75 service fee, but our home warranty covered the actual replacement part to get it heating our water again. We were so glad when it was all said and done. I’m pretty sure I would have paid anything to not bathe my two-year-olds in cold baths anymore. I’m sure you can imagine how well that went for me.

The seller of our house only spent a few hundred dollars on our home warranty policy for us and it covers us for a whole year. Even if your seller won’t spring for a home warranty, you should because in the grand scheme of spending thousands of dollars on closing costs and down payments, a few hundred more for a home warranty could save you money down the line.

Take Your Time With Upgrades


The only thing I want to do in life is go to Target and get every single organizing bin and decorative pillow they sell. Of course, I can’t do this because I have a mortgage to pay. However, I’ve been trying to get a few little things at a time to make our home look nice.

When you’re a first-time homebuyer who’s just purchased your first home, it’s tempting to go out and spend a lot of money on decorations and new furniture, but take your time. It might be more valuable to spend your money on upgrades that will improve the value of your home.

It also pays to shop around. Most of my living room furniture comes from IKEA, because let’s face it, I just can’t fathom spending thousands of dollars on furniture right now. Someday I’ll feel like a real grown up with beautiful furniture, but on that day I probably won’t have twin toddlers running around.

Overall, buying your first house is an exciting process, and with 32 percent of homebuyers last year being first-time home buyers, there are definitely a lot of you out there.

After going through the process myself including buying a home in another state, I can say that it pays to do your research ahead of time, know what you want, be willing to be flexible and not to go overboard. We’re really happy with our little bungalow that we bought and we look forward to making it ours and creating a lot of memories here.


Are you a first-time homebuyer who’s now a first-time homeowner? If so, what was your first time home buying experience like? If you’re a seasoned homebuyer, what are your tips for saving money and having a good experience?

The following two tabs change content below.
Catherine Alford is the go to personal finance expert for parents who want to better their finances and take on a more active financial role in their families.


  • Latoya @ Femme Frugality says:

    We renewed our home warranty for a few years after buying our home in 2010. We recently just cancelled it though. This is what we learned from our experience with them: rarely will they replace what’s covered under the warranty even though it needs replacing.

    We called numerous times about our garbage disposal, water heater, and our hvac system. We paid $75 and they would come out and fix it up until the next year it did the same thing (on all three of these things).

    Eventually, I called their bluff. Needless to say, this year we had to replace our garbage disposal and our hvac system that the warranty wouldn’t replace. When we had professionals we chose to come out and take a look at them they told us they were beyond repair and the hvac guy even took a picture to show us how bad of shape the system was in. It was horrible!!!

    I ended up cancelling the home warranty because I was paying $500 for a policy that only put a bandaid on our problem. We ended up paying almost $300 for a new disposal earlier this year and now we’re on the hook for a $8,000 hvac system:(

    The home warranty saved us a few times, but I always recommend new homeowners to make sure their ER fund is solid because the home warranty can be quite a fickle process.

    I’m glad you’re solid on that note though and I hope you have a better experience with your home warranty, Cat:)

    • Cat says:

      Ugh that sounds like a pain! Our seller paid for it so we were happy to have it but definitely good to know moving forward!

  • Kathy says:

    A couple of things come to mind…
    1. Just because the bank qualifies you for some exorbitant mortgage, that doesn’t mean you can afford it. First of all, the banks look at your total income, not your take home pay so things like taxes, retirement contributions, insurance or union dues are not considered. Do a spending report for yourself and if there is not $2,000 for that mortgage payment due on the bank’s number, you can’t afford that house.

    2. Don’t forget real estate taxes and insurance on top of the mortgage payment.

    3. Just because the bank qualifies you for $500,000 and you only buy a house for $400,000 it doesn’t mean the bank will give you the extra $100K for you to renovate and fix up the house. And a home equity line of credit means just that….you have to have equity in your home to get it.

    Although I’ve read that liars loans and 100% mortgages are creeping their way back into the industry (at the administrations encouragement) those are what burst the real estate bubble a few years back. Don’t get sucked back into that.

  • Jon @ Be Net Worthy says:

    We’re on house #4, so we have a little experience with the whole new house thing. I think your advice is good and although home warranties are not foolproof, if you can get the seller to buy one for you go for it!

    It will give you peace of mind during that first year when you will be focusing your efforts and money on fixing up other things.

    I would also recommend pacing yourself. You will undoubtedly have a long list of things you’d like to do to your new house. You don’t need to get them done overnight! Pick a few manageable and affordable projects, focus on getting those done. Relax, enjoy the holidays, and then start another. It’s unlikely the list will ever end, since you’ll be adding new projects to it constantly.

    Oh, and last but not least, don’t forget to enjoy your new place!

  • Suzie says:

    Cat, good article. Congrats on your new home. Sorry to hear about all the problems you are experiencing. Kathy, you make some very excellent points that I hope any readers considering buying their first home will take into very serious consideration. I totally agree. Do as much research as you can beforehand. Talk to anyone you know who owns a home. Also don’t expect your mortgage payment to stay the same year after year. Not necessarily true for everyone but always a possibility. Fortunately for me I was actually working at a small mortgage company when we bought our home and got a lot of excellent information and advice from a co-worker. She explained to me all about escrow which ended up being valuable to know because our mortgage payment ended up going up after the first year. That is just one example. Understanding mortgages and all the other costs involved with home ownership is so very important among many other things.

  • Tara says:

    I second what the other person says about home warranties. They do not replace things–they are only there to bring things to working condition, so when things really should be replaced, you can end up wasting the premium cost of warranty plus service charge when you should’ve cancelled the policy and used that $500+ money towards replacing the old appliance.

    Also, with what’s happening in Louisiana and what happened in Texas a while back, I would think spending that money toward flood insurance is a better investment, even if you’re in a moderate to low risk zone. Anyone who lives near a body of water should start considering flood insurance. Flooding is only going to get worse, especially as increased development forces changes with rainwater management (ie opening floodgates to prevent a more populous area from flooding, causing the more rural area to flood–happens near my family in west NJ)

  • Hannah says:

    Oh man, if you’re thinking upgrades, don’t do any cabinets until IKEA has their annual sale. It’s something like 25% off all cabinets.

    Best of luck- new homes tend to be expensive for the first few months.

Leave a Reply

Your email address will not be published. Required fields are marked *